(News Bulletin 247) – American stocks have the disadvantage of not being eligible for the tax advantages of the stock savings plan. But there are ways to gain exposure to the performance of the United States while still being eligible for the PEA.

This is what we call “American exceptionalism” in the stock market: the great outperformance of American markets. This year the S&P 500 gains 26.7%

when the Stoxx Europe 600, a pan-European index, gained only 8% over the same period. Over five years, the gap is even greater: the American index gains 90% compared to 48% for the Stoxx Europe 600.

US stocks may still have potential. Deutsche Bank expects the S&P 500 to reach 7,000 points at the end of 2025, an increase of 15.9% compared to its current prices.

Which can obviously encourage individuals to invest in this “American exceptionalism”. Problem: US stocks are at a disadvantage compared to European stocks. They are not eligible for the stock savings plan (PEA), and its tax advantages.

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Indirect exposure

Remember that after five years (within the limit of deposits capped at 150,000 euros) this system exempts from tax (either the single flat-rate deduction at 12.8% or the income tax scale) dividends and capital gains, but not the levies of 17.2%.

How to gain exposure to the performance of American stocks within the framework of a PEA? Remember that an indirect way remains to invest in European stocks with a strong presence in the United States and therefore likely to capture growth in the American economy that is superior to that of the Old Continent.

In October, Oddo BHF drew up, as part of a note on the American elections, a list of the Stoxx 600 stocks most exposed to the United States. For example, the German health group Fresenius derives 69.4% of its revenues in the country, the Danish pharmaceutical laboratory Novo Nordisk 54.9% and the French Publicis 50.8%, according to Oddo BHF. This week, JPMorgan also moved to “overweight” on Publicis due to its strong exposure to the United States.

Eligibility for the PEA requires, moreover, that a company issuing securities (and therefore a share) has its head office in the European Union. This means that companies present on Wall Street but domiciled in the European Union benefit from the PEA. This is the case, for example, of Accenture (domiciled in Ireland) or Spotify (which is Swedish but listed on the New York Stock Exchange).

Synthetic ETF

However, these options require the selection of precise values, remain inherently quite limited, and do not allow exposure to the overall performance of American stocks, as passive management would do.

However, it is possible to gain exposure to American stocks and even American stock indices through ETFs (an index fund that replicates the performance of a major index, such as the CAC 40) and therefore passive management. This by playing on the construction of these ETFs via so-called “synthetic” ETFs, that is to say they are exposed to the performance of an index via derivative instruments.

“To be eligible for the Equity Savings Plan, a fund must by definition invest at least 75% of its assets in securities of European companies. However, ETFs exposed to non-European indices can, in certain cases, be eligible for the PEA thanks to their construction method (we speak of synthetic replication)”, explains Benoit Sorel, head of the ETF, index and smart beta business line at Amundi.

“Concretely, in the case of the Amundi PEA S&P 500 UCITS ETF whose underlying index is American, the fund enters into a swap (a financial instrument which allows two parties to exchange performances on two distinct assets, Editor’s note) of performance with a counterpart to obtain the performance of the American index. At the same time, the fund purchases a basket of European securities respecting the threshold of 75% of European investments required. he elaborates.

“This method makes it possible to comply with the PEA rules while offering exposure to indices such as the S&P 500,” concludes the expert.

Remember that passive management and particularly ETFs are currently on the rise, particularly in France. According to a recent study by the Financial Markets Authority (AMF), in the second quarter of 2024, 266,300 French investors had carried out at least one transaction on an ETF, i.e. twice as many as over the same period of 2023.

In the United States, according to Morningstar, cited by the Financial Times, assets under passive management amounted to 13,300 billion dollars last year compared to 13,200 billion for active management.